Volvo parent to bring car-sharing subscription service to Europe2 min read . Updated: 01 Oct 2020, 07:36 AM IST
Subscribing to a car, rather than buying it, is fast becoming a popular option around the world.
China’s Zhejiang Geely Holding Group Co. is expanding its reach in Europe’s auto market by launching its upmarket Lynk & Co brand aimed at consumers who want to subscribe to and share cars.
The brand jointly owned by Geely and Volvo Cars will start selling memberships for 500 euros ($586) a month in Germany, France, Spain and four other countries late this year.
The cost covers insurance and maintenance and customers can lower it by agreeing to share the first model Lynk & Co will launch in Europe, a hybrid crossover SUV model called the 01.
“Instead of buying a car, you become a member of Lynk & Co," Chief Executive Officer Alain Visser said during a presentation in Gothenburg, Sweden, which is home to Volvo’s headquarters. “The more you share your car, the more you reduce the cost."
Lynk & Co is one of the more ambitious attempts by car companies to offer alternatives to ownership. Results so far have been mixed -- while Porsche recently expanded its US subscription service, Mercedes-Benz pulled the plug on a pilot project it started two years ago. General Motors Co. shut down its Maven car-sharing business earlier this year.
Visser said Lynk & Co will differentiate from other services by offering its memberships on a month-to-month basis. To unlock the potential of sharing, the company will need to build a base of paying members quickly.
“Our business case is not based on sharing but on memberships, but the sharing will need a footprint," the CEO said in an interview. “That’s why it’s quite essential for us that we, in the beginning, get a lot of members who want to have a vehicle."
Europe’s first Lynk & Co showroom -- billed as “clubs" where members can shop and sip drinks -- will open in Amsterdam at the end of October. A Gothenburg location will follow toward the end of the year.
Visser, who was formerly head of sales and marketing at Volvo, said Lynk & Co anticipates having more than 10,000 members next year and sees potential to increase that to over 100,000 as the brand rolls out across the continent.
Geely’s billionaire founder Li Shufu bought Volvo Cars from Ford Motor Co. in 2010 and has more recently taken stakes in Germany’s Daimler AG and Volvo Group, the Swedish truckmaker that is separate from the carmaker. In China, Lynk & Co has launched five models based on Geely and Volvo Cars’ modular architecture co-developed in Sweden.
Volvo Cars and Geely originally planned to manufacture Lynk & Co vehicles at a plant in Ghent, Belgium, in late 2019, but those plans were scrapped as Volvo had to rejigger its global manufacturing network in response to trade barriers.
The European launch comes as merger talks between Lynk & Co’s owners are poised to restart after Geely completes its planned listing on an exchange in Shanghai. Plans to combine were announced earlier this year but put on hold pending Geely’s share issuance.
Lynk & Co sold about 128,000 cars in China last year. Deliveries have increased 16% so far in 2020 despite a severe impact from the Covid-19 pandemic at the beginning of the year.